After having a relationship with an employee, McDonald's fired its chief executive, Steve Easterbrook. The British entrepreneur, who last year received almost $16 Million, is due to receive compensation for 26 weeks. Bloomberg reported that he would leave with more than $37 million, the bulk of which included previously issued shares.
The U.S. fast food giant said the relationship was consensual, but the board of the company determined that Easterbrook "violated company policy and showed poor judgment involving a recent consensual relationship with an employee."
Easterbrook admitted the relationship and acknowledged that he did make a mistake by violating corporate protocols, in an email. "Given the values of the company, I agree with the board that it is time for me to move on," he wrote. Easterbrook, however, has agreed not to work for a competitor for at least two years.
Easterbrook, 52, who is divorced, first worked as a manager for McDonald's London in 1993 before working his way up. He left for Pizza Express in 2011 and then for Asia's food chain Wagamama. He returned to McDonald's in 2013 and eventually became its head in the UK and northern Europe. In 2015, he became the Chief Executive Officer of the entire McDonald's food company.
McDonald's expanded its delivery and mobile payment services to emphasize convenience under his leadership. Additionally, Easterbrook is widely credited with revitalizing the menus and restaurants of the company, renovating stores and using better ingredients. During his tenure in the US, the value of the company's shares increased more than double.
Desiree Moore, Easterbrook's legal counsel told reporters that her client "is deeply grateful for his time at McDonald's and continues to believe in the company's future," and that "he acknowledges his error in judgment and supports the company's decision."
Employment lawyer Ruby Dinsmore, of Slater and Gordon, commented that it is now normal for companies to either have outright relationship bans or disclosure provisions that allow individuals to report them. She added that potential conflicts of interest and lawsuits if a partnership goes sour becomes a real business threat.
Dinsmore further explained that many people may see this as an invasion of privacy but companies also have their own interests to protect and are keen to be seen not only as having a policy for this kind of situation and implementing it at all levels.
McDonald's named as his new president and CEO Chris Kempczinski, the president of McDonald's USA. He was elected to the board of directors as well. Kempczinski thanked Easterbrook for his contributions.
"Steve brought me into McDonald's, and he was a patient and helpful mentor," he wrote in a statement. Kempczinski added that he is excited to lead the company together with a talented team, board, franchisees and suppliers. He is also committed to preserving the rich heritage of supporting consumers and creating value for investors and other stakeholders,
Kempczinski previously worked top positions at PepsiCo, Kraft, and Procter & Gamble. He joined McDonald's in 2015 as its executive vice president of strategy, business development, and innovation. He eventually spearheaded U.S. operations in 2017.
